No one would disagree that there have been some significant changes in the property market over the past 3 months, but where to from here?
The statistics are telling – CoreLogic has reported that in February 2022 Sydney posted its first decline in housing values since September 2020 with the market falling -0.1%, SQM Research is showing an 8.9% increase in stock levels in Feb 2022 compared to Feb 2021 (although total stock levels still remain below the five year average) and Domain has reported Sydney auction clearance rate %’s in the 60’s compared to results consistently over 80% in March 2021.
Our sales team are seeing more inconsistent selling conditions with greater variation in time on market (reflected in lower auction clearance rates) – some properties are still selling very quickly whilst others can linger on the market significantly longer. Buyers seem to have lost some of the sense of urgency with a greater choice of listings to consider and less fear of the market running away. Quality properties are still attracting competitive bidding although there can be a lack of confidence with some buyers hesitant to commit until they see others interested. Some of this hesitancy can be attributed to external factors – fear of the impact of interest rate rises and inflation, the upcoming federal election and general global instability. But not all the news is bad – the market is far from flooded with stock, interest rates will still be very low even with the predicted rate rises, premium properties are still selling consistently well and we are seeing enquiry levels on all listings remaining strong.
So has the Sydney market really run out of steam? Another boom in Sydney prices is hard to justify, but so is a market crash, which suggests we may see small peaks and troughs in values throughout the year as buyer sentiment oscillates, but no major movements. The positive take on this is that the remainder of 2022 may present both buyers and sellers an opportunity to transact in a market that is more predictable and consistent.
Josh Luschwitz B.Ec. LREA
Luschwitz Real Estate